Puerto Rico has developed a strong ecosystem of aerospace and defense suppliers with over a dozen companies already in place.
• Numerous and significant tax advantages
• Bilingual workforce
• Nationally-ranked engineering schools
• US Jurisdiction and Central Location
• Attractive and supportive business environment
Since the introduction of Law 73 of 2008, Puerto Rico has fostered an excellent business climate and continues to provide and enhance a host of incentives for the relocation and expansion of manufacturing and engineering facilities. On January 17, 2012 the Puerto Rico government enacted Act #20 Export Services Act and Act #22 Individual Investors Act.
To enjoy the benefits granted under these Acts, you will need to apply for and obtain a tax decree under the applicable Act, and enter into a tax relief and investment contract which will be signed by the Secretary of the Department of Economic Development and Commerce of Puerto Rico. Aero2pr assists clients with the tax decree application process and with other relocation needs and requirements.
The Export Services Act # 20, as amended on July 11 of 2012 includes the following incentives:
• 4% maximum corporate tax rate
• 100% tax exemption on dividends from export services businesses (for residents of Puerto Rico)
• 60% exemption from municipal license taxes
• Decree duration of 20 years, guaranteeing the benefits
• Individuals and corporations who “reside” in Puerto Rico are not subject to any US Federal taxation.
Current government policy is to have a tax exemption decree finalized in approximately 60 to 90 days.
Act # 22 to Promote the Relocation of Individual Investors provides that when an individual moves to Puerto Rico and becomes a “resident individual investor” (RII), this individual may enjoy significant tax advantages. The individual must be a Puerto Rico resident and must not have been a resident of Puerto Rico during the 15 years prior to January 17, 2012.
Any gain for investment appreciation that was accrued prior to becoming a RII will be taxed at:
a) 10% if such gain is recognized within 10 years after the individual became a RII.
b) 5% if the gains are recognized after the individual has been a RII for 10 years.
In addition, the law contemplates:
• No taxes on dividends
• No taxes on interest
• No taxes on short or long term capital gains
• As with the other laws, individuals and corporations who “reside” in Puerto Rico are not subject to any US Federal taxation.
The government has stated that applicants who submit a complete application should expect to complete the tax exemption decree process in 5 to 10 business days.